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Asian and Australian Stocks While You Were Sleeping

May 09, 2018

Asian & Australian Markets

Asian equities finished mixed with the Hang Seng (+0.44%) and Sensex (+0.31%) carrying over positive momentum from yesterday, while the Nikkei 225 closed 0.45% lower. Volume across major Asian markets was mixed, with the Nikkei trading 14.4% above its 10-day average, while there was less trading in the Hang Seng (19.6% below average) than usual

All sectors in the Nikkei 225 were negative, with healthcare (-2.37%) being the largest laggard. Energy (+2.35%) was a significant outperformer in the Hang Seng, but consumer discretionary stocks (-0.71%) disappointed. All sectors in the Sensex, except for consumer staples (-0.14%), were positive

Australian equities advanced with the ASX +0.26%. Energy stocks (+1.34%) were the best performers in the ASX 200, while financials (-0.51%) finished as the only sector in the red. Market breadth in the ASX 200 was decidedly positive with 128 stocks advancing (59 declines). The ASX 200 traded nearly 11% below its 10-day average volume

Asian Outlook

A report in the Nikkei Asian Review cited remarks by Changyong Rhee, the Asia and Pacific director of the IMF, that Asian economies will receive a 0.1% to 0.5% increase in GDP due to US tax cuts, which has led to increased demand for foreign products

Average wage growth in Japan for March came in higher than expected on a y/y basis (+2.1% vs 1.1% projected), which was the biggest average wage increase in 15 years

The Indian government is planning a 70% “safeguard” tariff on the import of solar panels from China and Malaysia as the country attempts to become less dependent on foreign assistance for electricity. Currently, India acquires 88% of its solar equipment from China

Australian Outlook

Australia’s Federal Budget for 2018/2019 was slightly more positive than expected. The Australian government projects an AUD$14.5 billion deficit in 2019, which is softer than the consensus of an AUD$15.0 billion deficit. The government of Australia forecasts a return to a budget surplus in FY2020, one year earlier than previously estimated

As part Australia’s Federal Budget, a AUD$13.4 billion, four-year long, tax package was included which will provide tax cuts to low and mid income households